After a divorce is over, there may be sadness, relief and a sense that the hard work is over. Depending on the complexity of your divorce, there may be a list of to-dos to adhere to your settlement agreement. Although you should check with your divorce attorney about your specific agreement, here is a rundown of some possible tasks that will have to be completed after finalizing the papers.
Insurance Policies: If you are keeping vehicles or homes that were joint assets in the divorce, you will need to transfer ownership of these policies into your name only.
If you were covered on your spouse’s health insurance, you most likely have lost that coverage. Be sure to obtain your own health insurance policy at this time. You may look into COBRA coverage. If it’s available, you can stay on your spouse’s policy for a short period – but you must be proactive in searching out your options and making a choice to keep COBRA coverage. No one is required to inform you of this right. Although you may think staying on your spouse’s insurance through COBRA is convenient, it’s also much more expensive than obtaining your own policy.
It’s best to call all of your possible insurance providers and find out what your premium will be.
Your life insurance policy, if still applicable, may need to be changed to reflect a new beneficiary other than your ex-spouse.
Asset Investment: You may wish to discuss your financial assets post-divorce with a financial advisor. The best investment vehicles for your new situation may be different than your previous investments. For instance, while you may have been planning for your children’s college expenses, you may no longer be responsible for these bills. Your estate planning will likely need to be revised as well.
Mortgage Refinancing: If one spouse is retaining the family home, they will need to refinance the mortgage in their own name. While a quitclaim deed can be filed, it only removes one spouse from the ownership of the home – but does not absolve them of the financial responsibility. Therefore, the spouse leaving may choose to wait to remove their name from the deed until the refinance is complete.
Record Your Updated Address: All parties must inform the court of any change of address and subsequent new addresses. Doing so guarantees that each party can receive notices and payments.
Tax Filing Issues: Be sure to consult with an accountant or CPA to discuss tax ramifications concerning the division of certain assets and your new filing status. Be particularly careful when filing the first year after the divorce, as your situation may have changed mid-year.
Joint Financial Accounts / Credit Lines: All financial accounts, credit cards, and lines of credit that are joint accounts should be closed and transferred into the appropriate party’s name.
Retirement Beneficiaries: Just as you changed the beneficiaries on your life insurance policy, you will also want to do so with all retirement accounts.
As stated, every divorce is unique, and your marital agreement may outline different terms based upon negotiations. Be sure to discuss your final divorce agreement with your family law attorney to make sure you haven’t missed any other tasks or to-dos. Failing to change your documentation may result in a breach of your agreement and could harm your financial status in the future.
Richard V. Ellis is a family law and bankruptcy attorney in Sarasota, Florida. If you are facing a divorce, bankruptcy proceeding, or both – call today for the professional representation you deserve.